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RohanGreySecondPaper 10 - 11 Jun 2012 - Main.DanielKetani
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Money and Unemployment | | |
Eben, I would like to continue working on this over Summer. | |
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> | | | | -- RohanGrey - 23 May 2012 | |
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> | Rohan, I agree with you that that the emphasis in monetary policy needs to shift to ensuring full employment. It's particularly disturbing given that in the past couple of years, a number of politicians have made proposals ranging from ending the Federal Reserve altogether to eliminating its dual mandate in favor of a single mandate for price stability. But I don't really think the platinum coin plan is a good solution to these problems. The economic problems with it aside (the original proposal was just focused on paying short term debt, using it to pay all the debt and for all social programs would be highly inflationary [though that might not be such a bad thing]), the real problem to me is that its just a gimmick in the law. It could have been used to deal with an imminent default, but it would eventually be unsustainable, whether because of the Supreme Court, which would have a pretty easy time finding that using a law about creating coins to control the entirety of monetary policy is unconstitutional, or outside political pressure, since there is really no support for the idea of the President having full control of monetary and fiscal policy.
Really, I think the problem isn't with the tools to create full employment, its a question of building support for the idea that its not just desirable, but a necessity. There are all sorts of ways to try to create full employment without resorting to an overt attempt to ignore the other branches of the government. I think if we view the law as a weak social force, there needs to be support outside the law for what the law is trying to accomplish, but as you pointed out support for this idea has dwindled. The narrative you referred to about viewing the government's budget as like a family budget, however wrong it may be, has been highly effective, maybe because the notion that short term sacrifice is a virtue has been so engrained in our culture. Or maybe its just due to corruption, though the rich would seem to benefit as well from full employment. It's strange to me that the obvious counter-narrative to the household budget, that a family takes care of their own even in hard times, has not really been used, though maybe that says something about how the culture both within the United States and the West in general has changed. I'd be curious as to your thoughts about why austerity has been so compelling to officials and the public both here and abroad.
-- DanielKetani - 11 Jun 2012 | | | \ No newline at end of file |
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